China looking to buy Indian pharma

India imports most of its bulk drugs from China. This has raised concerns about the pharma industry’s dependence on China for Active Pharmaceutical Ingredients (APIs).Saibal Dasgupta | TNN | December 02, 2016, 07:03 IST

“Today, more and more Chinese companies see India as their first destination when going global,” Wang Dehua, Director of the Institute for the Southern and Central Asian Studies at the Shanghai Municipal Center for International Studies, said in a commentary on Thursday published in the state backed Global Times.

Last July, Shanghai-based Fosun Pharmaceutical Group announced it was looking to acquire an 86 per cent stake in India’s Gland Pharma for $1.26 billion. If successful, it would be the largest pharmaceutical deal involving any Chinese company in India.

Wang indicated that the deal was aimed at boosting the company’s global ambitions besides building business relationships with India.

"Fosun is not merely targeting the Indian market through its acquisition of Gland Pharma”, he said adding, "India leads the world in generic drugs and its industry is quite internationally oriented. Acquiring Gland Pharma could help Fosun crack overseas markets.”

Collaboration in the pharmaceutical industry would "let China learn from India and could also prompt China to open up its pharmaceutical industry,” Wang suggested, particularly in areas like manufacturing generics and research and development where India industry outperforms China.

Fosun, he suggested, could be the first of many Chinese pharma companies that follow this path to going global.

are eyeing India’s pharma industry for acquisitions and tie-ups as a path to go global as they grapple with how to crack overseas markets.

India imports most of its bulk drugs from China. This has raised concerns about the pharma industry’s dependence on China for Active Pharmaceutical Ingredients (APIs).

Last Monday, Commerce Minister Nirmala Sitharaman told the Lok Sabha in a written reply that “efforts are being made for revival of the API industry to lessen dependency on import of key starting materials, intermediates and bulk drugs including from China.” India imported $1.63 billion worth of bulk drugs in 2015-16, accounting for 64 per cent of total imports.

Indian pharmaceutical companies have struggled to enter the Chinese market which is dominated by big Western pharma companies, Wang said the deals could provide entry into the large China market.

Indian firms that have set up offices in China have complained of a lack of market access, pointing to overly restrictive regulatory procedures, an issue that Delhi has taken up with Beijing for close to a decade, however with little success.